- Kodak's net sales decreased 7% in Q2 2007 compared to Q2 2006, primarily due to declines in volumes and prices across many business units. However, gross profits increased 14% due to cost reductions. - Digital revenues increased 3% led by enterprise solutions, while traditional revenues declined 17% due to declines in film capture and retail printing. - Consumer Digital Imaging Group sales declined 10% due to volume and price declines, but gross profits increased 23% due to cost reductions. - Film Products Group sales declined 15% due to declines in consumer film capture, but gross profits declined only slightly.

1. EASTMAN KODAK COMPANY
FINANCIAL DISCUSSION DOCUMENT
SECOND QUARTER 2007 COMPARED WITH SECOND QUARTER 2006
RESULTS OF OPERATIONS – CONTINUING OPERATIONS
CONSOLIDATED
Worldwide Revenues
Net worldwide sales were $2,510 million for the second quarter of 2007 as compared with $2,688 million for
the second quarter of 2006, representing a decrease of $178 million or 7%. The decrease in net sales was
primarily due to declines in volumes and unfavorable price/mix, which decreased second quarter sales by
approximately 6.6 and 2.7 percentage points, respectively. The decrease in volumes was primarily driven by
Consumer Film Capture within FPG, snapshot printing within Digital Capture and Devices and the traditional
portion of Retail Printing, both within CDG, and the traditional consumables portion of Prepress Solutions
within GCG. The negative price/mix was primarily driven by Digital Capture and Devices and Retail Printing,
both within CDG, as well as Consumer Film Capture and Entertainment Imaging within FPG. Second quarter
sales were positively impacted by foreign exchange, which increased sales by $71 million or approximately 2.6
percentage points.
Digital Strategic Product Groups' Revenues
The Company's digital product sales were $1,460 million for the second quarter of 2007 as compared with
$1,417 million for the prior year quarter, representing an increase of $43 million, or 3%, primarily driven by
increased revenues from Enterprise Solutions and growth in the digital prepress consumables portion of
Prepress Solutions, both within GCG. CDG digital revenues were essentially flat year-over-year primarily
driven by the decline in snapshot printing, partially offset by sales of the recently introduced digital picture
frames.
Traditional Strategic Product Groups' Revenues
Net sales of the Company's traditional products were $1,044 million for the second quarter of 2007 as compared
with $1,262 million for the prior year quarter, representing a decrease of $218 million, or 17%, primarily driven
by declines in Consumer Film Capture within FPG, Retail Printing within CDG, and traditional prepress
consumables sales within GCG.
Product sales from new technologies were $6 million for the second quarter of 2007 and $9 million for the
second quarter of 2006.
Gross Profit
Gross profit was $658 million for the second quarter of 2007 as compared with $575 million for the second
quarter of 2006, representing an increase of $83 million, or 14%. The gross profit margin was 26.2% in the
current quarter as compared with 21.4% in the prior year quarter. The 4.8 percentage point increase was
primarily attributable to reduced manufacturing and other costs, which increased gross profit margins by
approximately 6.5 percentage points, and were driven by a combination of lower restructuring-related charges,
lower depreciation expense, and the impact of the Company's cost reduction initiatives, partially offset by
increased silver and aluminum costs. Gross profit margins were also favorably impacted by foreign exchange,
which increased gross profit margins by approximately 0.8 percentage points. These increases were partially
offset by unfavorable price/mix and volume declines, which reduced gross profit margins by approximately 2.0
percentage points and 0.5 percentage points, respectively. The negative price/mix was primarily driven by
Digital Capture and Devices within CDG, Prepress Solutions within GCG and price/mix declines within FPG,
while the volume declines were largely driven by Consumer Film Capture within FPG, snapshot printing within
CDG, and the traditional portion of Retail Printing within CDG.
1

2. Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were $431 million for the second quarter of 2007 as
compared with $518 million for the prior year quarter, representing a decrease of $87 million, or 17%. SG&A
as a percentage of sales decreased from 19% in the second quarter of 2006 to 17% in the second quarter of
2007. The year-over-year decrease in SG&A is primarily attributable to significant Company-wide cost
reduction actions.
Research and Development Costs
Research and development costs (R&D) were $128 million for the second quarter of 2007 as compared with
$152 million for the second quarter of 2006, representing a decrease of $24 million, or 16%. R&D as a
percentage of sales was 5% for the second quarter of 2007 as compared with the prior year quarter of 6%. This
decrease was primarily driven by the continuing realignment of resources, as well as the timing of development
of new products.
Restructuring Costs and Other
Restructuring costs and other were $295 million for the second quarter of 2007 as compared with $156 million
for the prior year quarter, representing an increase of $139 million or 89%. The most significant portion of the
second quarter costs was a $238 million impairment charge taken in the current quarter related to the sale of the
Company's Xiamen, China facility. These costs, as well as the restructuring-related costs reported in cost of
goods sold, are discussed in further detail under quot;RESTRUCTURING COSTS AND OTHERquot; below.
Other Operating (Income) Expenses, Net
The other operating (income) expenses, net category includes gains and losses on sales of capital assets and
certain asset impairment charges. Other operating income was $33 million for the second quarter of 2007 as
compared with other operating expenses of $6 million for the second quarter of 2006, representing an
improvement of $39 million. This improvement was largely driven by the gain on the sale of the Light
Management Films business, as well as increased gains on sales of capital assets in the current quarter.
Loss From Continuing Operations Before Interest, Other Income (Charges), Net and Income Taxes
The loss from continuing operations before interest, other income (charges), net and income taxes for the
second quarter of 2007 was $163 million as compared with a loss of $257 million for the second quarter of
2006, representing an improvement in earnings of $94 million. This change is attributable to the reasons
described above.
Interest Expense
Interest expense for the second quarter of 2007 was $31 million as compared with $43 million for the prior year
quarter, representing a decrease of $12 million, or 28%. Lower interest expense is primarily due to lower debt
levels as a result of the full payoff of the Company's Secured Term Debt in the current quarter.
Other Income (Charges), Net
The other income (charges), net category includes interest income, income and losses from equity investments,
and foreign exchange gains and losses. Other income for the current quarter was $21 million as compared with
other income of $6 million for the second quarter of 2006. The increase of $15 million is primarily attributable
to higher interest income, and was also impacted by lower losses on foreign exchange transactions than in the
prior year.
2

3. Income Tax (Benefit) Provision
For the second quarter of 2007, the Company recorded a benefit of $38 million on a pre-tax loss of $173
million, representing an effective rate of 22.0%. The difference of $23 million between the recorded benefit of
$38 million and the benefit of $61 million that would result from applying the U.S. statutory rate of 35.0% is
primarily attributable to: (1) losses generated in certain jurisdictions outside the U.S., which were not benefited
and (2) the mix of earnings from operations in certain lower-taxed jurisdictions outside the U.S. Other
significant items that caused the difference from the statutory tax rate include non-U.S. tax benefits of $27
million associated with total worldwide restructuring costs and asset impairments; a net benefit of $15 million
associated with adjustments uncertain tax benefits; and a provision of $42 million associated with the
establishment of valuation allowances in foreign jurisdictions.
During the second quarter the Company identified a deferred tax asset in a foreign jurisdiction, which should
have been appropriately reserved with a valuation allowance in a prior period. Therefore, the Company
recorded a valuation allowance of $20 million in the current quarter to appropriately reflect the net deferred tax
asset balance. This amount is included in the $42 million provision discussed above.
In accordance with SFAS No. 109, quot;Accounting for Income Taxes,quot; the Company recorded a tax benefit in
continuing operations associated with the realization of current year losses in certain jurisdictions where it has
historically had a valuation allowance due to the recognition of the pre-tax gain in discontinued operations.
For the second quarter of 2006, the Company recorded a provision of $61 million on a pre-tax loss of $294
million, representing an effective rate of (20.7)%. The difference of $164 million between the recorded
provision of $61 million and the benefit of $103 million that would result from applying the U.S. statutory rate
of 35.0% is primarily attributable to: (1) losses generated within the U.S. and in certain jurisdictions outside the
U.S., which were not benefited and (2) the mix of earnings from operations in certain lower-taxed jurisdictions
outside the U.S. Other significant items that caused the difference from the statutory tax rate include non-U.S.
tax benefits of $27 million associated with total worldwide restructuring costs and asset impairments; and
discrete tax charges relating primarily to purchase accounting for the Creo acquisition, tax rate changes, and
impacts from ongoing tax audits with respect to open tax years of $40 million.
Loss From Continuing Operations
The loss from continuing operations for the second quarter of 2007 was $135 million, or $.47 per basic and
diluted share, as compared with a loss from continuing operations for the second quarter of 2006 of $355
million, or $1.24 per basic and diluted share, representing an improvement in earnings of $220 million. This
improvement in earnings from continuing operations is attributable to the reasons described above.
CONSUMER DIGITAL IMAGING GROUP
Worldwide Revenues
Net worldwide sales for CDG were $1,000 million for the second quarter of 2007 as compared with $1,105
million for the second quarter of 2006, representing a decrease of $105 million, or 10%. The decrease in net
sales was comprised of volume declines, which reduced net sales by approximately 7.3 percentage points, and
unfavorable price/mix, which reduced net sales by approximately 3.8 percentage points. The decrease in
volumes was primarily driven by snapshot printing and the traditional portion of Retail Printing, partially offset
by sales of the recently introduced digital picture frames, while the negative price/mix was largely attributable
to Digital Capture and Devices and lower kiosk equipment sales offset by higher media sales within Retail
Printing. These declines were partially offset by favorable foreign exchange, which increased net sales by
approximately 1.6 percentage points.
Net worldwide sales of Digital Capture and Devices, which includes consumer digital cameras, accessories,
memory products, snapshot printers and related media, and intellectual property royalties, decreased 3% in the
second quarter of 2007 as compared with the prior year quarter, primarily reflecting negative price/mix on
digital cameras and lower snapshot printing volumes, partially offset by sales of new digital picture frames,
3

4. intellectual property royalties and favorable exchange. For digital still cameras, Kodak remains in the top three
market position on a worldwide basis through May.
Net worldwide sales of Retail Printing decreased 17% in the second quarter of 2007 as compared with the prior
year quarter, reflecting volume declines and negative price/mix, partially offset by favorable foreign exchange.
Sales of photofinishing services declined 43% from the second quarter of 2006, reflecting continuing industry
film processing volume declines. This decline in photofinishing services was partially offset by increased sales
of kiosks and related media, which increased 2% from the prior year quarter. The change in kiosks and related
media sales reflects strong consumables sales at retail locations, with 4x6 media volumes increasing 36% versus
last year, substantially offset by lower kiosk equipment sales.
Digital Strategic Product Groups' Revenues
CDG digital product sales are comprised of digital capture and devices, kiosks/media, online printing, consumer
inkjet systems, and imaging sensors.
Digital product sales for CDG were $645 million for the second quarter of 2007 as compared with $647 million
for the prior year quarter, representing a decrease of $2 million. The decrease was primarily driven by declines
in sales of digital cameras and snapshot printing, partially offset by growth in intellectual property royalties and
sales of digital picture frames.
Traditional Strategic Product Groups' Revenues
CDG traditional product sales are comprised of consumer and professional photographic paper, photochemicals
and photofinishing services.
Traditional product sales for CDG were $355 million for the second quarter of 2007 as compared with $458
million for the second quarter of 2006, representing a decrease of $103 million, or 22%. This decrease was
primarily driven by declines in photofinishing services and photographic paper.
Gross Profit
Gross profit for CDG was $179 million for the second quarter of 2007 as compared with $146 million for the
prior year quarter, representing an increase of $33 million or 23%. The gross profit margin was 17.9% in the
current quarter as compared with 13.2% in the prior year quarter. The 4.7 percentage point increase was
primarily attributable to reductions in cost, which improved gross profit margins by approximately 6.3
percentage points, and favorable foreign exchange, which improved gross profit margins by approximately 1.0
percentage point. The reductions in cost were primarily driven by lower depreciation expense, the impact of the
Company's cost reduction initiatives and more effective product portfolio management, partially offset by costs
associated with the scaling of manufacturing and new product introduction activities in the Consumer Inkjet
Systems business and by adverse silver costs. These improvements in gross profit margins were partially offset
by unfavorable price/mix and volume declines. Price/mix negatively impacted gross profit margins by
approximately 2.3 percentage points, primarily driven by Digital Capture and Devices and kiosks/media,
partially offset by the year-over-year increase in intellectual property royalties. Volume declines reduced gross
profit margins by approximately 0.4 percentage points, primarily driven by snapshot printing, and the traditional
portion of Retail Printing.
Selling, General and Administrative Expenses
SG&A expenses for CDG decreased $31 million, or 15%, from $207 million in the second quarter of 2006 to
$176 million in the current quarter, and decreased as a percentage of sales from 19% for the second quarter of
2006 to 18% for the current quarter. This decrease was primarily driven by focused cost reduction initiatives
and improved go-to-market structure, partially offset by increased advertising expenses associated with
Consumer Inkjet Systems.
4

5. Research and Development Costs
R&D costs for CDG decreased $13 million, or 18%, from $72 million in the second quarter of 2006 to $59
million in the current quarter and decreased as a percentage of sales from 7% for the second quarter of 2006 to
6% for the current quarter. This dollar decrease is attributable to spending incurred in 2006 related to the
development of Consumer Inkjet Systems, which were introduced in the first quarter of 2007, and related to cost
reduction actions within CDG's other businesses.
Loss From Continuing Operations Before Interest, Other Income (Charges), Net and Income Taxes
The loss from continuing operations before interest, other income (charges), net and income taxes for CDG was
$55 million in the second quarter of 2007 as compared with a loss of $133 million in the second quarter of
2006, representing an improvement in earnings of $78 million or 59%, as a result of the factors described
above.
FILM PRODUCTS GROUP
Worldwide Revenues
Net worldwide sales for FPG were $559 million for the second quarter of 2007 as compared with $660 million
for the second quarter of 2006, representing a decrease of $101 million, or 15%. The decrease in net sales was
comprised of: (1) lower volumes, which decreased second quarter sales by approximately 15.3 percentage
points and were primarily attributable to Consumer Film Capture and (2) declines related to negative price/mix,
which reduced net sales by approximately 2.5 percentage points and were primarily attributable to Consumer
Film Capture and Entertainment Imaging. These decreases were partially offset by favorable foreign exchange,
which increased net sales by approximately 2.4 percentage points.
Net worldwide sales of Consumer Film Capture, including consumer roll film (35mm and APS film), one-time-
use cameras (OTUC), professional films, and reloadable traditional film cameras, decreased 30% in the second
quarter of 2007 as compared with the second quarter of 2006, primarily reflecting continuing industry volume
declines and negative price/mix, partially offset by favorable exchange.
Net worldwide sales for Entertainment Imaging films, which includes origination, intermediate, and print films
for the entertainment industry, were flat compared with the prior year, primarily reflecting volume increases in
color print films and favorable exchange across all product lines, partially offset by volume declines in
origination films and unfavorable price/mix across all product lines.
Gross Profit
Gross profit for FPG was $229 million for the second quarter of 2007 as compared with $243 million for the
prior year quarter, representing a decrease of $14 million or 6%. The gross profit margin was 41.0% in the
current quarter as compared with 36.8% in the prior year quarter. The 4.2 percentage point increase was
primarily attributable to decreased manufacturing and other costs, which positively impacted gross profit
margins by approximately 7.6 percentage points, which were driven by lower depreciation expense and the
impact of the Company's cost reduction initiatives, partially offset by increased silver costs. Favorable foreign
exchange increased gross profit margins by approximately 1.7 percentage points. These increases were partially
offset by unfavorable price/mix and volume declines, which reduced gross profit margins by approximately 4.7
percentage points and 0.6 percentage points, respectively. Negative price/mix impacted essentially all
businesses in FPG, while the volume declines were primarily driven by Consumer Film Capture.
Selling, General and Administrative Expenses
SG&A expenses for FPG decreased $35 million, or 29%, from $119 million in the second quarter of 2006 to
$84 million in the current quarter, and decreased as a percentage of sales from 18% in the prior year quarter to
5

6. 15% in the current quarter. The decline in SG&A was attributable to the concentrated efforts of the business to
reduce costs.
Research and Development Costs
R&D costs for FPG were $5 million in the second quarter of 2006 as compared with $8 million in the current
quarter, and remained constant as a percentage of sales at 1%.
Earnings From Continuing Operations Before Interest, Other Income (Charges), Net and Income Taxes
Earnings from continuing operations before interest, other income (charges), net and income taxes for FPG
were $137 million in the second quarter of 2007 as compared with earnings of $119 million in the second
quarter of 2006, representing an increase of $18 million or 15%, as a result of the factors described above.
GRAPHIC COMMUNICATIONS GROUP
Worldwide Revenues
Net worldwide sales for GCG were $929 million for the second quarter of 2007 as compared with $908 million
for the prior year quarter, representing an increase of $21 million, or 2%. The increase in net sales was
primarily attributable to favorable exchange, which increased net sales by approximately 4.2 percentage points,
primarily within Prepress Solutions and Document Imaging. This increase was partially offset by unfavorable
price/mix, which decreased sales by approximately 1.5 percentage points, and volume declines, which
decreased sales by approximately 0.4 percentage points. The unfavorable price/mix was primarily driven by
Prepress Solutions and Document Imaging, partially offset by favorable price/mix within Enterprise Solutions.
The volume declines were driven by Document Imaging, Digital Printing Solutions, and traditional prepress
consumables within Prepress Solutions, partially offset by volume increases in Enterprise Solutions and digital
prepress consumables within Prepress Solutions.
Net worldwide sales of Prepress Solutions increased 1%, primarily driven by increased sales of digital plates,
partially offset by declines in sales of analog plates.
Net worldwide sales of Document Imaging were flat compared with prior year, driven by increased service
revenue, offset by declines in sales of scanners and traditional document imaging media.
Net worldwide sales of Digital Printing Solutions decreased 2%, primarily driven by declines in
electrophotographic printing equipment and commercial inkjet printing equipment, partially offset by growth in
consumables and service.
Net worldwide sales of Enterprise Solutions increased 40%, primarily attributable to revenue growth from
workflow software and digital front-end controllers.
Digital Strategic Product Groups' Revenues
GCG digital product sales are comprised of Enterprise Solutions, Digital Printing Solutions, portions of
Prepress Solutions and portions of Document Imaging.
Sales of digital products and services for GCG were $815 million for the second quarter of 2007 as compared
with $770 million for the prior year quarter, representing an increase of $45 million, or 6%. The increase in
digital products and services revenue was primarily attributable to increased sales from Enterprise Solutions and
the digital portions of Prepress Solutions, as well as the favorable impact of exchange.
Traditional Strategic Product Groups' Revenues
GCG traditional product sales are comprised of sales of traditional prepress consumables, including analog
plates and graphics film, and traditional document imaging equipment and media. These sales were $114
million for the current quarter as compared with $138 million for the prior year quarter, representing a decrease
6

7. of $24 million, or 17%. The decrease in sales was primarily attributable to lower volumes of analog plates and
graphics film.
Gross Profit
Gross profit for GCG was $265 million for the second quarter of 2007 as compared with $253 million in the
prior year quarter, representing an increase of $12 million, or 5%. The gross profit margin was 28.5% in the
current quarter as compared with 27.9% in the prior year quarter. The increase in the gross profit margin of 0.6
percentage points was primarily attributable to favorable price/mix, which increased gross profit margins by
approximately 0.7 percentage points and was primarily driven by Enterprise Solutions and Prepress Solutions.
Reductions in manufacturing and other costs increased gross profit margins by approximately 0.2 percentage
points, primarily reflecting cost reduction actions and lower depreciation expense, offset by higher aluminum
costs, while unfavorable foreign exchange reduced gross profit margins by approximately 0.4 percentage points.
Selling, General and Administrative Expenses
SG&A expenses for GCG were $170 million for the second quarter of 2007 as compared with $185 million in
the prior year quarter, representing a decrease of $15 million, or 8%, and decreased as a percentage of sales
from 20% to 18%. The decrease in SG&A is largely attributable to continuing integration synergies and
targeted cost reductions.
Research and Development Costs
R&D costs for GCG decreased $2 million, or 4%, from $52 million for the second quarter of 2006 to $50
million for the current quarter, and decreased as a percentage of sales from 6% in the second quarter of 2006 to
5% in the current year quarter.
Earnings From Continuing Operations Before Interest, Other Income (Charges), Net and Income Taxes
Earnings from continuing operations before interest, other income (charges), net and income taxes for GCG
were $44 million in the second quarter of 2007 as compared with earnings of $16 million in the second quarter
of 2006, representing an increase of $28 million, or 175%. This increase in earnings is attributable to the
reasons outlined above.
ALL OTHER
Worldwide Revenues
Net worldwide sales for All Other were $22 million for the second quarter of 2007 as compared with $15
million for the second quarter of 2006, representing an increase of $7 million, or 47%.
Loss From Continuing Operations Before Interest, Other Income (Charges), Net and Income Taxes
The loss from continuing operations before interest, other income (charges), net and income taxes for All Other
was $6 million in the current quarter as compared with a loss of $25 million in the second quarter of 2006. This
$19 million improvement in earnings was largely driven by lower R&D spending related to the display
business.
RESULTS OF OPERATIONS - DISCONTINUED OPERATIONS
On April 30, 2007, the Company sold all of the assets and business operations of its Health Group segment to
Onex Healthcare Holdings, Inc. (“Onex”) (now known as Carestream Health, Inc.), a subsidiary of Onex
Corporation, for up to $2.55 billion. The price was composed of $2.35 billion in cash at closing and $200
million in additional future payments if Onex achieves certain returns with respect to its investment. If Onex
investors realize an internal rate of return in excess of 25% on their investment, the Company will receive
payment equal to 25% of the excess return, up to $200 million.
7

8. The Company recognized a pre-tax gain of $980 million on the sale in the second quarter of 2007. The pre-tax
gain excludes the following: up to $200 million of potential future payments related to Onex's return on its
investment as noted above; potential charges related to settling pension obligations with Onex in future periods;
and any adjustments that may be made in the future that are currently under review.
The Company used a portion of the initial $2.35 billion cash proceeds to fully repay its approximately $1.15
billion of Secured Term Debt. About 8,100 employees of the Company associated with the Health Group
transitioned to Carestream Health, Inc. as part of the transaction. Also included in the sale were manufacturing
operations focused on the production of health imaging products, as well as an office building in Rochester,
NY.
Upon authorization of the Company's Board of Directors on January 8, 2007, the Company met all the
requirements of SFAS No. 144, quot;Accounting for the Impairment or Disposal of Long-Lived Assets,quot; for
accounting for the Health Group segment as a discontinued operation. As such, the Health Group business
ceased depreciation and amortization of long-lived assets. In accordance with EITF No. 87-24, quot;Allocation of
Interest to Discontinued Operations,quot; the Company allocated certain interest expense on debt that was required
to be repaid as a result of the sale. Interest expense allocated to discontinued operations totaled $7 million and
$22 million for the three months ended June 30, 2007 and 2006, respectively.
Total Company earnings from discontinued operations for the three months ended June 30, 2007 and 2006 of
$727 million (including a pre-tax gain on sale of $980 million) and $73 million, respectively, were net of a
provision for income taxes of $257 million, and a benefit for income taxes of $11 million, respectively.
NET EARNINGS (LOSS)
Net earnings for the second quarter of 2007 were $592 million, or $2.06 per basic and diluted share, as
compared with a net loss for the second quarter of 2006 of $282 million, or $.98 per basic and diluted share,
representing an improvement in earnings of $874 million or 310 %. This improvement in earnings is
attributable to the reasons outlined above.
RESTRUCTURING COSTS AND OTHER
The Company has undertaken a cost reduction program that was initially announced in January 2004.
This program is referred to as the “2004–2007 Restructuring Program.” This program was expected to
result in total charges of $1.3 billion to $1.7 billion over a three-year period, of which $700 million to
$900 million related to severance, with the remainder relating to the disposal of buildings and equipment.
Overall, Kodak's worldwide facility square footage was expected to be reduced by approximately one-
third. Approximately 12,000 to 15,000 positions worldwide were expected to be eliminated through these
actions primarily in global manufacturing, selected traditional businesses and corporate administration.
The Company subsequently expanded the program to extend into 2007, and increased the expected
employment reductions and total charges. On February 8, 2007, the Company again updated the ranges
for anticipated restructuring activity. The Company now expects that the total employment reductions
will be in the range of 28,000 to 30,000 positions and total charges will be in the range of $3.6 billion to
$3.8 billion.
The increase in expected cost is due to the realization that further reductions are required to achieve the
Company’s target cost model.
The aforementioned 2004-2007 Restructuring Program underpins a dramatic transformation of the
Company focused on two primary elements of cost restructuring: manufacturing infrastructure and
operating expense rationalization. As this four-year effort has progressed, the underlying business
model necessarily has evolved, requiring broader and more costly manufacturing infrastructure
reductions (primarily non-cash charges) than originally anticipated, as well as similarly broader
rationalization of selling, administrative and other business resources (primarily severance charges). In
addition, the recent divestiture of the Health Group has further increased the amount of reductions
necessary to appropriately scale the Corporate infrastructure.
8

9. The actual charges for initiatives under this program are recorded in the period in which the Company
commits to formalized restructuring plans or executes the specific actions contemplated by the program
and all criteria for restructuring charge recognition under the applicable accounting guidance have been
met.
Restructuring Programs Summary
The activity in the accrued restructuring balances and the non-cash charges incurred in relation to all of the
Company's restructuring programs were as follows for the second quarter of 2007:
Other
Balance Adjustments Balance
March 31, Costs Cash Non-cash and June 30,
(in millions) 2007 Incurred (1) Reversals Payments (2) Settlements Reclasses (3) 2007
2004-2007 Restructuring Program:
Severance reserve $ 196 $ 19 $ - $ (83) $ - $ 41 $ 173
Exit costs reserve 26 30 - (32) - - 24
Total reserve $ 222 $ 49 $ - $ (115) $ - $ 41 $ 197
Long-lived asset impairments and
inventory write-downs $ - $ 257 $ - $ - $ (257) $ - $ -
Accelerated depreciation $ - $ 15 $ - $ - $ (15) $ - $ -
Pre-2004 Restructuring Programs:
Severance reserve $ - $ - $ - $ - $ - $ - $ -
Exit costs reserve 6 - - - - - 6
Total reserve $ 6 $ - $ - $ - $ - $ - $ 6
Total of all restructuring programs $ 228 $ 321 $ - $ (115) $ (272) $ 41 $ 203
(1) The costs incurred include both continuing operations of $316 million and discontinued operations of $5
million.
(2) During the three months ended June 30, 2007, the Company paid approximately $120 million related
to restructuring. Of this total amount, $115 million was recorded against restructuring reserves, while
$5 million was recorded against pension and other postretirement liabilities.
(3) The total restructuring charges of $321 million include pension and other postretirement charges and
credits for curtailments, settlements and special termination benefits. However, because the impact of
these charges and credits relate to the accounting for pensions and other postretirement benefits, the
related impacts on the Consolidated Statement of Financial Position are reflected in their respective
components as opposed to within the accrued restructuring balances at June 30, 2007. Accordingly,
the Other Adjustments and Reclasses column of the table above includes reclassifications to Other
long-term assets and Pension and other postretirement liabilities for the position elimination-related
impacts on the Company's pension and other postretirement employee benefit plan arrangements,
including net curtailment and settlement gains and special termination benefits of $37 million and
reclassifications to Other long-term liabilities for other severance-related costs of $2 million.
Additionally, the Other Adjustments and Reclasses column of the table above includes foreign
currency translation of $2 million.
The costs incurred, net of reversals, which total $321 million for the three months ended June 30, 2007,
include $15 million and $6 million of charges related to accelerated depreciation and inventory write-
downs that were reported in cost of goods sold in the accompanying Consolidated Statement of Operations
for the three months ended June 30, 2007. Of the remaining costs incurred, net of reversals, $5 million
9

10. was included in discontinued operations and $295 million was reported as restructuring costs and other in
the accompanying Consolidated Statement of Operations for the three months ended June 30, 2007. The
severance costs and exit costs require the outlay of cash, while long-lived asset impairments, accelerated
depreciation and inventory write-downs represent non-cash items.
2004-2007 Restructuring Program Activity
The Company implemented certain actions under the program during the second quarter of 2007. As a
result of these actions, the Company recorded charges of $321 million in the second quarter of 2007,
which were composed of severance, long-lived asset impairments, exit costs, inventory write-downs, and
accelerated depreciation of $19 million, $251 million, $30 million, $6 million, and $15 million,
respectively. Included in these amounts, $3 million of severance and $2 million of exit costs are presented
as discontinued operations. The severance costs related to the elimination of approximately 1,100
positions, including approximately 175 photofinishing, 425 manufacturing, 25 research and development
and 475 administrative positions. The geographic composition of the positions to be eliminated includes
approximately 325 in the United States and Canada and 775 throughout the rest of the world. The
reduction of the 1,100 positions and the $49 million charges for severance and exit costs are reflected in
the 2004-2007 Restructuring Program table below. The $251 million charge in the second quarter for
long-lived asset impairments was included in restructuring costs and other in the accompanying
Consolidated Statement of Operations for the three months ended June 30, 2007, respectively. The
charges taken for inventory write-downs of $6 million were reported in cost of goods sold in the
accompanying Consolidated Statement of Operations for the three months ended June 30, 2007.
As a result of initiatives implemented under the 2004-2007 Restructuring Program, the Company also
recorded $15 million of accelerated depreciation on long-lived assets in cost of goods sold in the
accompanying Consolidated Statement of Operations for the three months ended June 30, 2007. The
accelerated depreciation relates to long-lived assets accounted for under the held and used model of
SFAS No. 144. The total amount of $15 million relates to $14 million of manufacturing facilities and
equipment, and $1 million of administrative facilities that will be used until their abandonment. The
Company will incur approximately $4 million of accelerated depreciation in the third quarter of 2007 as a
result of the initiatives already implemented under the 2004-2007 Restructuring Program.
In April 2007, the Company entered into an agreement to sell its manufacturing site in Xiamen, China.
This sale closed in the second quarter of 2007 and resulted in a non-cash charge of approximately $238
million. This action is part of the 2004-2007 Restructuring Program.
Under this program, on a life-to-date basis as of June 30, 2007, the Company has recorded charges of
$3,220 million, which was composed of severance, long-lived asset impairments, exit costs, inventory
write-downs and accelerated depreciation of $1,322 million, $611 million, $304 million, $75 million and
$908 million, respectively. The severance costs related to the elimination of approximately 25,600
positions, including approximately 6,425 photofinishing, 11,950 manufacturing, 1,450 research and
development and 5,775 administrative positions.
The following table summarizes the activity with respect to the charges recorded in connection with the
focused cost reduction actions that the Company has committed to under the 2004-2007 Restructuring
Program and the remaining balances in the related reserves at June 30, 2007:
10

11. Long-lived Asset
Exit Impairments
Number of Severance Costs and Inventory Accelerated
(dollars in millions) Employees Reserve Reserve Total Write-downs Depreciation
2004 charges - continuing operations 8,975 $ 405 $ 95 $ 500 $ 156 $ 152
2004 charges - discontinued operations 650 13 4 17 1 -
2004 reversals - continuing operations - (6) (1) (7) - -
2004 utilization (5,175) (169) (47) (216) (157) (152)
2004 other adj. & reclasses - 24 (15) 9 - -
Balance at 12/31/04 4,450 267 36 303 - -
2005 charges - continuing operations 7,850 472 82 554 160 391
2005 charges - discontinued operations 275 25 2 27 1 -
2005 reversals - continuing operations - (3) (6) (9) - -
2005 utilization (10,225) (377) (95) (472) (161) (391)
2005 other adj. & reclasses - (113) 4 (109) - -
Balance at 12/31/05 2,350 271 23 294 - -
2006 charges - continuing operations 5,150 266 66 332 97 273
2006 charges - discontinued operations 475 52 3 55 3 12
2006 reversals - continuing operations - (3) (1) (4) - -
2006 utilization (5,700) (416) (67) (483) (100) (285)
2006 other adj. & reclasses - 58 - 58 - -
Balance at 12/31/06 2,275 228 24 252 - -
Q1 2007 charges - continuing operations 1,075 53 22 75 11 65
Q1 2007 charges - discontinued operations 50 17 - 17 - -
Q1 2007 utilization (1,000) (84) (20) (104) (11) (65)
Q1 2007 other adj. & reclasses - (18) - (18) - -
Balance at 3/31/07 2,400 196 26 222 - -
Q2 2007 charges - continuing operations 1,100 16 28 44 257 15
Q2 2007 charges - discontinued operations - 3 2 5 - -
Q2 2007 utilization (1,250) (83) (32) (115) (257) (15)
Q2 2007 other adj. & reclasses - 41 - 41 - -
Balance at 6/30/07 2,250 $ 173 $ 24 $ 197 $ - $ -
As a result of the initiatives already implemented under the 2004-2007 Restructuring Program,
severance payments will be paid during periods through 2008 since, in many instances, the employees
whose positions were eliminated can elect or are required to receive their payments over an extended
period of time. Most exit costs have been paid or will be paid during 2007. However, certain costs,
such as long-term lease payments, will be paid over periods after 2007.
The charges of $321 million recorded in the second quarter of 2007 included $10 million applicable to
FPG, $24 million applicable to CDG, $10 million applicable to GCG, and $272 million that was
applicable to manufacturing, research and development, and administrative functions, which are shared
across all segments. The remaining $5 million is applicable to discontinued operations.
The restructuring actions implemented during the second quarter of 2007 under the 2004-2007
Restructuring Program are expected to generate future annual cost savings of approximately $89 million
and future annual cash savings of approximately $71 million. These cost savings began to be realized
by the Company beginning in the second quarter of 2007, and are expected to be fully realized by the
end of 2007 as most of the actions and severance payouts are completed. These total cost savings are
expected to reduce future cost of goods sold, SG&A, and R&D expenses by approximately $52 million,
$36 million, and $1 million, respectively.
11

12. Based on all of the actions taken to date under the 2004-2007 Restructuring Program, the program is
expected to generate annual cost savings of approximately $1,535 million, including annual cash
savings of $1,461 million, as compared with pre-program levels. The Company began realizing these
savings in the second quarter of 2004, and expects the savings to be fully realized by the end of 2007 as
most of the actions and severance payouts are completed. These total cost savings are expected to
reduce cost of goods sold, SG&A, and R&D expenses by approximately $973 million, $419 million,
and $143 million, respectively.
The above savings estimates are based primarily on objective data related to the Company's severance
actions. Savings resulting from facility closures and other non-severance actions that are more difficult
to quantify are not included. The Company reaffirms its estimate of total annual cost savings including
both employee-related costs and facility-related costs under the extended 2004-2007 Restructuring
Program of $1.6 billion to $1.8 billion, as announced in July 2005, and does not expect the final annual
cost savings to differ materially from this estimate.
Pre-2004 Restructuring Programs Activity
At June 30, 2007, the Company had remaining exit costs reserves of $6 million, relating to restructuring
plans committed to or executed prior to 2004. Most of these remaining exit costs reserves represent
long-term lease payments, which will continue to be paid over periods throughout and after 2007.
CASH FLOW ACTIVITY
The Company’s cash and cash equivalents increased $456 million for the six months ending June 30,
2007 to $1,925 million. The increase resulted primarily from $2,316 million of net cash provided by
investing activities, offset by $1,145 million of net cash used in financing activities and $725 million of
net cash used in operating activities for the six months ending June 30, 2007.
The net cash used in continuing operations from operating activities of $695 million for the six months
ending June 30, 2007 was primarily attributable to increases in inventories of $149 million and a
decrease in liabilities excluding borrowings of $765 million. The increase in inventories is primarily
due to inventory balances needed to meet seasonal revenue patterns. The decrease in liabilities
excluding borrowings is primarily due to restructuring-related severance benefits and exit costs, lower
trade payables and payment of incentive compensation accruals. These uses of cash were partially
offset by decreases in receivables of $90 million. The decrease in receivables is a result of seasonally
lower sales levels in the six month period ended June 30, 2007 compared with fourth quarter 2006 sales.
In addition, the Company's net earnings of $441 million, which, when adjusted for earnings from
discontinued operations, net of income taxes; depreciation and amortization; the gain on sales of
businesses/assets; restructuring costs, asset impairments and other non-cash charges; and benefit for
deferred taxes, provided $245 million of operating cash. Net cash used in discontinued operations from
operating activities was $30 million.
The net cash used in continuing operations from investing activities of $19 million was utilized primarily
for capital expenditures of $125 million, partially offset by proceeds from sales of businesses and assets of
$116 million. Net cash provided by discontinued operations from investing activities was $2,335 million
due to the proceeds received in connection with the sale of the Health Group business. The net cash used in
financing activities of $1,145 million was primarily the result of a net decrease in borrowings primarily
related to the full repayment of the Secured Term Debt.
The Company’s primary uses of cash included restructuring payments, debt payments, capital additions,
employee benefit plan payments/contributions, and working capital needs.
Capital additions were $125 million in the six months ended June 30, 2007, with the majority of the
spending supporting new products, manufacturing productivity and quality improvements, infrastructure
improvements, equipment placements with customers, and ongoing environmental and safety initiatives.
During the six months ended June 30, 2007, the Company expended $235 million against restructuring
reserves and pension and other postretirement liabilities, primarily for the payment of severance benefits.
12

13. Employees whose positions were eliminated could elect to receive severance payments for up to two years
following their date of termination.
The Company has a dividend policy whereby it makes semi-annual payments which, when declared, will
be paid on the Company’s 10th business day each July and December to shareholders of record on the close
of the first business day of the preceding month. On May 9, 2007, the Board of Directors declared a semi-
annual cash dividend of $.25 per share payable to shareholders of record at the close of business on June 1,
2007. This dividend was paid on July 16, 2007.
13

14. CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this report may be forward-looking in nature, or quot;forward-looking statementsquot; as
defined in the United States Private Securities Litigation Reform Act of 1995. For example, references
to the Company's expectations for restructuring plans and charges, receivables, guarantees, amortization
expense, cost savings, cash savings, and employment reductions are forward-looking statements.
Actual results may differ from those expressed or implied in forward-looking statements. In addition,
any forward-looking statements represent the Company's estimates only as of the date they are made,
and should not be relied upon as representing the Company's estimates as of any subsequent date.
While the Company may elect to update forward-looking statements at some point in the future, the
Company specifically disclaims any obligation to do so, even if its estimates change. The forward-
looking statements contained in this report are subject to a number of factors and uncertainties,
including the successful:
• execution of the digital growth and profitability strategies, business model and cash plan;
• implementation of the cost reduction programs;
• transition of certain financial processes and administrative functions to a global shared services
model and the outsourcing of certain functions to third parties;
• implementation of, and performance under, the debt management program, including
compliance with the Company's debt covenants;
• development and implementation of product go-to-market and e-commerce strategies;
• protection, enforcement and defense of the Company's intellectual property, including defense
of its products against the intellectual property challenges of others;
• implementation of intellectual property licensing and other strategies;
• integration of the Company's businesses to SAP, the Company's enterprise system software;
• completion of various portfolio actions;
• reduction of inventories;
• integration of acquired businesses and consolidation of the Company's subsidiary structure;
• improvement in manufacturing productivity and techniques;
• improvement in working capital management and cash conversion cycle;
• improvement in supply chain efficiency; and
• implementation of the strategies designed to address the decline in the Company's traditional
businesses.
The forward-looking statements contained in this report are subject to the following additional risk
factors:
• inherent unpredictability of currency fluctuations, commodity prices and raw material costs;
• competitive actions, including pricing;
• changes in the Company's debt credit ratings and its ability to access capital markets;
• the nature and pace of technology evolution;
• changes to accounting rules and tax laws, as well as other factors which could impact the
Company's reported financial position or effective tax rate;
• pension and other postretirement benefit cost factors such as actuarial assumptions, market
performance, and employee retirement decisions;
• general economic, business, geo-political and regulatory conditions or unanticipated
environmental liabilities or costs;
• market growth predictions;
• continued effectiveness of internal controls; and
• other factors and uncertainties disclosed from time to time in the Company's filings with the
Securities and Exchange Commission.
Any forward-looking statements in this report should be evaluated in light of these important factors
and uncertainties.
14

15. EASTMAN KODAK COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(in millions, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
2007 2006 2007 2006
Net sales $ 2,510 $ 2,688 $ 4,629 $ 4,980
Cost of goods sold 1,852 2,113 3,542 3,936
Gross profit 658 575 1,087 1,044
Selling, general and administrative expenses 431 518 826 1,025
Research and development costs 128 152 265 300
Restructuring costs and other 295 156 380 294
Other operating (income) expenses, net (33) 6 (39) 11
Loss from continuing operations before interest,
other income (charges), net and income taxes (163) (257) (345) (586)
Interest expense 31 43 56 84
Other income (charges), net 21 6 38 38
Loss from continuing operations before income taxes (173) (294) (363) (632)
(Benefit) provision for income taxes (38) 61 (54) 69
Loss from continuing operations (135) (355) (309) (701)
Earnings from discontinued operations, net of income taxes 727 73 750 121
NET EARNINGS (LOSS) $ 592 $ (282) $ 441 $ (580)
Basic and diluted net earnings (loss) per share:
Continuing operations $ (0.47) $ (1.24) $ (1.08) $ (2.44)
Discontinued operations 2.53 0.26 2.61 0.42
Total $ 2.06 $ (0.98) $ 1.53 $ (2.02)
Number of common shares used in basic net earnings (loss)
per share 287.6 287.3 287.5 287.2
Incremental shares from assumed conversion of options - - - -
Number of common shares used in diluted net earnings (loss)
per share 287.6 287.3 287.5 287.2
15

16. EASTMAN KODAK COMPANY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited)
(in millions)
June 30, December 31,
2007 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,925 $ 1,469
Receivables, net 2,021 2,072
Inventories, net 1,188 1,001
Deferred income taxes 109 108
Other current assets 122 96
Assets of discontinued operations - 811
Total current assets 5,365 5,557
Property, plant and equipment, net 1,993 2,602
Goodwill 1,621 1,584
Other long-term assets 4,095 3,509
Assets of discontinued operations - 1,068
TOTAL ASSETS $ 13,074 $ 14,320
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and other current
liabilities $ 3,333 $ 3,712
Short-term borrowings 292 64
Accrued income and other taxes 399 347
Liabilities of discontinued operations - 431
Total current liabilities 4,024 4,554
Long-term debt, net of current portion 1,332 2,714
Pension and other postretirement liabilities 3,595 3,934
Other long-term liabilities 1,631 1,690
Liabilities of discontinued operations - 40
Total liabilities 10,582 12,932
Commitments and Contingencies (Note 7)
SHAREHOLDERS’ EQUITY
Common stock, $2.50 par value 978 978
Additional paid in capital 880 881
Retained earnings 6,322 5,967
Accumulated other comprehensive income (loss) 88 (635)
8,268 7,191
Less: Treasury stock, at cost 5,776 5,803
Total shareholders’ equity 2,492 1,388
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY $ 13,074 $ 14,320
16

17. EASTMAN KODAK COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30,
(in millions) 2007 2006
Cash flows from operating activities:
Net earnings (loss) $ 441 $ (580)
Adjustments to reconcile to net cash used in operating activities:
Earnings from discontinued operations, net of income taxes (750) (121)
Equity in earnings from unconsolidated affiliates - (7)
Depreciation and amortization 446 637
(Gain) loss on sales of businesses/assets (48) 1
Non-cash restructuring costs, asset impairments and other charges 274 78
Benefit for deferred income taxes (118) (221)
Decrease in receivables 90 189
(Increase) decrease in inventories (149) 72
Decrease in liabilities excluding borrowings (765) (453)
Other items, net (116) (149)
Total adjustments (1,136) 26
Net cash used in continuing operations (695) (554)
Net cash (used in) provided by discontinued operations (30) 153
Net cash used in operating activities (725) (401)
Cash flows from investing activities:
Additions to properties (125) (161)
Net proceeds from sales of businesses/assets 116 33
Acquisitions, net of cash acquired (2) -
Investments in unconsolidated affiliates - (9)
Marketable securities - sales 77 57
Marketable securities - purchases (85) (60)
Net cash used in continuing operations (19) (140)
Net cash provided by (used in) discontinued operations 2,335 (23)
Net cash provided by (used in) investing activities 2,316 (163)
Cash flows from financing activities:
Net decrease in borrowings with maturities of 90 days or less (6) (21)
Proceeds from other borrowings 16 568
Repayment of other borrowings (1,160) (599)
Exercise of employee stock options 5 -
Net cash used in financing activities (1,145) (52)
Effect of exchange rate changes on cash 10 6
Net increase (decrease) in cash and cash equivalents 456 (610)
Cash and cash equivalents, beginning of period 1,469 1,665
Cash and cash equivalents, end of period $ 1,925 $ 1,055
17

18. Net Sales from Continuing Operations by Reportable Segment and All Other
(in millions)
Three Months Ended June 30, Six Months Ended June 30,
Foreign Foreign
Currency Currency
Change Impact* Change Impact*
2007 2006 2007 2006
Consumer Digital Imaging Group
Inside the U.S. $ 512 $ 565 -9% 0% $ 901 $ 990 -9% 0%
Outside the U.S. 488 540 -10 +3 877 1,017 -14 +3
Total Consumer Digital Imaging Group 1,000 1,105 -10 +2 1,778 2,007 -11 +1
Film Products Group
Inside the U.S. 133 201 -34 0 250 332 -25 0
Outside the U.S. 426 459 -7 +3 767 828 -7 +4
Total Film Products Group 559 660 -15 +2 1,017 1,160 -12 +3
Graphic Communications Group
Inside the U.S. 304 314 -3 0 586 627 -7 0
Outside the U.S. 625 594 +5 +6 1,207 1,151 +5 +7
Total Graphic Communications Group 929 908 +2 +4 1,793 1,778 +1 +4
All Other
Inside the U.S. 19 13 +46 0 29 30 -3 0
Outside the U.S. 3 2 +50 0 12 5 +140 0
Total All Other 22 15 +47 0 41 35 +17 0
Consolidated
Inside the U.S. 968 1,093 -11 0 1,766 1,979 -11 0
Outside the U.S. 1,542 1,595 -3 +5 2,863 3,001 -5 +4
Consolidated Total $ 2,510 $ 2,688 -7% +3% $ 4,629 $ 4,980 -7% +3%
* Represents the percentage point change in segment net sales for the period
that is attributable to foreign currency fluctuations
18

19. (Loss) Earnings from Continuing Operations Before Interest, Other Income (Charges), Net and
Income Taxes by Reportable Segment and All Other
(in millions)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 Change 2007 2006 Change
Consumer Digital Imaging Group $ (55) $ (133) +59% $ (169) $ (300) +44%
Percent of Sales (6)% (12)% (10)% (15)%
Film Products Group $ 137 $ 119 +15% $ 211 $ 170 +24%
Percent of Sales 25% 18% 21% 15%
Graphic Communications Group $ 44 $ 16 +175% $ 60 $ 40 +50%
Percent of Sales 5% 2% 3% 2%
All Other $ (6) $ (25) +76% $ (19) $ (41) +54%
Percent of Sales (27)% (167)% (46)% (117)%
Total of segments $ 120 $ (23) +622% $ 83 $ (131) +163%
Percent of Sales 5% (1)% 2% (3)%
Restructuring costs and other (316) (224) (467) (440)
Other operating (expenses) income, net 33 (6) 39 (11)
Legal settlement - (4) - (4)
Interest expense (31) (43) (56) (84)
Other income (charges), net 21 6 38 38
Consolidated loss from continuing operations before income
taxes $ (173) $ (294) +41% $ (363) $ (632) +43%
19